BANGLADESH

Photo by: Georgios Kollidas

People's Republic of Bangladesh

Gana-Prajatantri Bangladesh

COUNTRY OVERVIEW

LOCATION AND SIZE.

Bangladesh is situated in southern Asia, on the delta of the 2 largest
rivers on the Indian subcontinent—the Ganges and Jamuna
(Brahmaputra). It borders with India in the west, north, and east, with
Burma (also known as Myanmar) in the southeast, and with the Bay of
Bengal in the south. The country's area is 144,000 square
kilometers (55,598 square miles), and it is divided into 6
administrative divisions (Dhaka, Chittagong, Khulna, Barisal, Rajshai
and Sylhet) and 4 major municipal corporations (Dhaka, Chittagong,
Khulna and Rajshahi). Comparatively, the territory of Bangladesh is
slightly greater than the state of New York. Bangladesh's capital
city, Dhaka, is located in the central part of the country. Bangladesh
occupies the eastern part of the Bengal region (the western part of the
region is occupied by the Indian state of West Bengal), which
historically was part of the great civilizations in the northeast of the
Indian subcontinent.

POPULATION.

The population of Bangladesh was estimated at 129,194,224 in July of
2000, making Bangladesh the tenth-most populous state in the world.
Having a total area the size of New York state, the country has a
population equal to half that of the United States or 8 times the
population of New York State. It has almost doubled since the 1960s, due
to improved health, medical facilities, and longer life expectancy. In
2000 the birth rate stood at 25.44 per 1,000 (slightly higher than the
world average), adding around 190,000 people every month. Meanwhile the
death rate stood at 8.73 per 1,000. The estimated population growth rate
is 1.59 percent, and if the current trend remains unchanged, the
population could double within the next 45 years.

The Bangladesh population is relatively homogeneous, with Bengalis
making up 98 percent of the population and other ethnic groups,
including various tribal groups, making up the remaining 2 percent.
Religion plays a very important role in this country, and the main
division is between Islam and Hinduism. Almost 88.3 percent of the
population are Muslims, 10.5 percent are Hindus, and 1.2 percent are
Buddhists, Christians, or animists. The Bangladesh population is very
young, with 36 percent below age 14 and just 4 percent of the population
older than 65. In 1998 over 80 percent of Bangladeshis were living in
rural areas, although during the last decade the growth of the
population in the urban areas was twice as fast as in rural areas (due
to both the migration of the rural population and the high birth rate).
The rapid growth of the urban population is especially noticeable in the
urban centers of Dhaka, Chittagong, Khulna, and Rajshahi.

In 1970, the population of Bangladesh was about 66 million, and the
country at one time had one of the highest birth rates in Asia. The
country's population doubled between 1950 and 1977 and almost
doubled again between 1977 and 2001, putting severe pressure on the
natural resources and leading to land shortages. In the 1970s the
government introduced population control and family

planning initiatives, aided by various international organizations,
including United Nations Children's Fund (UNICEF), United Nations
Population Fund (UNFPA), and the World Bank. The fertility rate (the
average number of children born to a woman) in Bangladesh declined from
6.8 babies per woman in 1965 to around 3 per woman in 1999. However,
these population control initiatives were undermined by the fact that
two-thirds of the population still lives in rural areas, where
historically population growth was very high, and by the fact that
almost two-thirds of the people in the country are illiterate. A number
of issues still need to be addressed, including the supply of safe
drinking water, malnutrition among children (which remains the highest
in the world), early and forced marriages, and illiteracy among the
population in general and women in particular.

The population growth in the country was offset by rapidly rising
emigration
of people, both permanent and temporary, in the 1980s and 1990s. The
major destinations for Bangladeshi workers seeking temporary jobs are
Kuwait, Malaysia, Qatar, Saudi Arabia, Oman, and the United Arab
Emirates, where they are employed mainly in the low-skill and low-wage
construction and service sectors and in agricultural plantations. Other
popular destinations for emigration are Western Europe, the Americas and
Australia, where large Bangladeshi communities formed during the last 3
decades. According to the
CIA World Factbook,
the emigration rate stood at the 0.77 migrant(s) per 1,000 population
in 2000, or around 1 million a year.

INDUSTRY

MINING.

The main commercially viable natural resource in Bangladesh is gas,
although there are reports of the existence of moderate-sized reserves
of coal. Total gas reserves are estimated at 21,000 billion cubic feet.
In 2000 Bangladesh utilized 370 billion cubic feet, mainly for domestic
consumption. The major gas fields are situated in Greater Sylhet
district, the Bay of Bengal, and Greater Chittagong district.
Transnational corporations are keen to be involved in gas exploration in
Bangladesh and its exportation to the huge Indian market, however the
Bangladeshi government is resistant to the idea of exporting the gas, as
according to local experts' estimates the proven reserves could
run out within the next 30 to 40 years.

MANUFACTURING.

During the 20th century Bangladesh, like neighboring Burma (Myanmar) and
Nepal, largely missed the industrialization wave that changed the
economies of many countries in the Asian region, such as Malaysia,
Singapore, and Taiwan. At the beginning of 2001, manufacturing
contributed about 24.3 percent of the GDP, providing employment to 6.2
million people or 11 percent of the workforce. Between 1989 and 1999,
the manufacturing sector in Bangladesh grew at an average annual rate of
around 7.2 percent, albeit from a very low base. The cheap, reliable,
and abundant labor available in Bangladesh is attractive to the
world's leading transnational corporations, but they have been
very slow to move into the country, as they face regular industrial
unrest led by radical trade unions, poorly developed infrastructure, red
tape, and a very small local market. As in neighboring India, the
Bangladeshi government promoted the idea of state-led industrialization
combined with heavy state involvement in and state control of enterprise
activities.

The manufacturing sector in Bangladesh comprises mainly small,
privately-owned, often unmechanized enterprises or large, state-owned,
often loss-making enterprises. The main industrial centers are Dhaka,
Chit-tagong, Khulna, and Rajshahi, which have (by local standards)
well-developed transport infrastructure, including access to seaports
and railways and the sizeable and very cheap unskilled and skilled labor
force. The industrial enterprises concentrate mainly on the production
of jute goods, ready-made garments, foodstuff processing, and chemical
production.

Most of Bangladeshi jute goods are produced in large state-controlled
enterprises for export to the United States, Europe, and other markets,
contributing Tk13.3 billion in 1997-98 to the country's export
earnings and Tk11.7 billion in 1998-99. According to the
EIU Country Profile,
Bangladesh accounts for 90 percent of world jute fiber exports. The
jute processing enterprises are vulnerable to downturns in the regional
and international market and experienced some
recession
in 1998-99. Additionally, during the last few years the demand for jute
in the international market has been in decline due to increasing use of
synthetic materials in the areas where jute was previously used.
However, these jute processing businesses still have plenty of the cheap
local supply of raw materials and, if they continue to improve the
quality of their products, with efficient management and marketing they
may expand their export potential.

During the last 2 decades Bangladesh has found a strong niche in
ready-made garments (RMG), becoming one of the world's leading
exporters of these products. There are around 2,600 small and
medium-size garment-manufacturing enterprises, providing employment for
about 1.4 million local workers, mainly women. Access to cheap and
reliable local labor makes Bangladeshi
RMG manufacturers very competitive in the international market,
although most of the fabrics and machinery must be imported (in 2000
Bangladesh imported 160,000 metric tons of cotton from the United
States). According to the U.S. Department of State, total clothing
exports reached about US$5 billion in 1999-2000, mainly to the United
States, Europe, and Canada. Bangladesh especially benefited from the
multi-fiber arrangement with the United States and the generalized
system of preferences with the European Union, which set special quotas
for the RMG imports from Bangladesh. The RMG sector experienced rapid
growth during the last 5 years, but with the rise of free trade and
elimination of the quota system at the end of 2004, Bangladesh will face
very tough competition from other Asian countries such as China, India,
Indonesia, Thailand, and Vietnam.

Bangladesh has a well-established food processing sector, which relies
on domestic agricultural production and is oriented mainly to domestic
needs. It includes sugar refining and milling, production of edible
oils, processing and preserving of fruits and fruit juices as well as
fish processing, especially shrimp and prawns. As a tropical country
Bangladesh has a plentiful domestic supply of exotic fruits and sea
species.

In the 1990s 2 major changes affected the development of the industrial
sector in Bangladesh. First, the end of the numerous military coups and
the establishment of civil government brought in political
stabilization, which attracted direct international investments and
encouraged the inflow of foreign aid. Secondly, the policy of economic
liberalization, structural adjustment, and privatization helped to
increase the competitiveness of the local industries and encouraged them
to search for new overseas markets. In order to promote the
attractiveness of the Bangladesh economy, the government established
special export-processing zones (EPZ). They are situated in Chittagong,
Dhaka, Chalna (near Mongla port in Khulna) and in Commila, where
investors are given access to well-developed infrastructure and enjoy
tax breaks and other privileges. By the year 2000, the EPZs had
attracted around US$415 million worth of foreign investments and more
than 150 firms had moved there. According to the U.S. State Department,
the United States is the single largest foreign investor in Bangladesh
with total fixed direct investment of about $750 million. The major
investment projects were in the chemical, electronics, and electrical
industries. The United States is followed by Malaysia, Japan, and the
United Kingdom, and the next tier of investors are Singapore, India,
Hong Kong, China, and South Korea. The U.S. State Department estimates
U.S. investment in Bangladesh will be about $2.5 billion in 2 to 4
years.

SERVICES

TOURISM.

Tourism is a small but rapidly growing sector of Bangladeshi economy.
According to the International Labor Organization, together with the
wholesale and retail sector it provides employment for almost 6.0
million people (1996), or around 10.8 percent of the labor force.
Government statistics state that 171,000 tourists visited the country in
1998, contributing Tk2.4 billion to the national economy. Most visitors
were from India, Australia, Germany, the United Kingdom, and the United
States.

Tourism could only take off in the 1990s, after the stabilization of the
political situation in the country and the end of the tribal insurgency
in the Chittagong Hill Tracts area (southeast of the country).
Bangladesh has huge potential for attracting foreign tourists as it has
a deep cultural heritage, a number of ancient monuments and temples, and
a rich natural heritage, including tropical forests, beautiful hills,
rivers, and national parks. The country offers bargain-shopping and
exotic souvenirs, as well as a wide variety of activities, from
eco-friendly to adventure tourism. However, it needs to renovate and
expand its hotels' infrastructure and other services, which are
still underdeveloped.

FINANCIAL SERVICES.

The financial service industry remains underdeveloped in spite of a
decade of major reforms conducted under the Financial Sector Reforms
Program. According to the International Labor Organization, this sector
provides employment for 213,000 people (1996). Since independence it has
been under state control, as the major commercial banks were
nationalized soon after independence. The local banks are often accused
of providing poor financial services and being beset by corruption,
inefficient management and capital inadequacies. Bangladesh lags behind
in the introduction of computerized banking payment systems, the
development of electronic payment systems, and electronic banking. The
Agrani Bank, Janata Bank, Rupali Bank and Sonali Bank are the main
financial institutions still under state control. They account for
almost half of all deposits.

In 1999 the government launched a Commercial Bank Reform Project
intended to improve the functioning of the private commercial banks. One
bank has provided a success story: the Grameen Bank, which was founded
by university professor Mohammad Yunus, pioneered in providing small
credits to local communities in need. At present the IMF and the World
Bank, which are often notoriously ineffective in the poor countries of
Asia and Africa, have carefully studied the Grameen Bank's
microcredit
model with a view to applying it in other developing countries.

RETAIL.

In Bangladesh, as in many other Asian countries, many small- and
medium-sized businesses have
been built around the retail sector and are often associated with small
shops and restaurants. The retail sector provides employment for a large
number of people, but it still remains relatively underdeveloped, due to
a generally low level of income among the population. There are still a
number of small family-run traditional shops and cafes, selling mainly
locally-made products.

The United States has found that the enforcement of intellectual
property rights is "weak" and that "intellectual
property infringement is common." The Bangladeshi government has
begun to address this problem seriously, introducing a new Copyright Act
in 2000 in order to bring the country's copyright laws into
compliance with the WTO. This act updated the Patents and Design Act of
1911, and some other outdated regulations.

DEPENDENCIES

Bangladesh has no territories or colonies.

BIBLIOGRAPHY

Alauddin, M., and Samiul Hasan, editors.
Development, Governance and the Environment in South Asia: A Focus on
Bangladesh.
New York: St. Martin's Press, 1999.